Only six lenders have passed on the full cuts to their customers, with the big four nowhere in sight.
Athena, Homestar, Freedom Lend, Auswide, U Bank and Freedom Lend are the only lenders that have passed the full 25 basis point cash rate reduction announced by the Reserve Bank last week.
The big four, carrying the majority of home loans, passed on abysmal cuts with Westpac and NAB both reducing by 15 bps. ANZ cut 14 bps and Commonwealth Bank only cut 13 bps.
In an interview with Ross Greenwood, Treasurer Josh Frydenberg says the big four have ignored the Reserve Bank’s expectation that the full interest rate cuts will be passed on.
Frydenberg says: “So it’s not just the Government that they are going against here, they’re also going against the advice of the Reserve Bank, and it’s very disappointing.”
Out of the major banks, the best basic variable owner occupier is National Australia Bank at 3.20 per cent, followed by ANZ and 3.24 per cent, Commonwealth Bank at 3.27 per cent and Westpac at 3.28 per cent.
The best current variable home loan rates on the market are from the smaller lenders with Reduce Home Loans now offering 2.69 per cent, Homestar offering 2.74 per cent and Freedom Lend and G&C Mutual Bank both offering 2.79 per cent.
Frydenberg says: “People should shop around, get the best deal, but also make their displeasure known to their banks. Because the rate cuts should be passed on in full, and that would be a good thing for consumers.”
Other banks outside the big four that dropped a partial rate cut of 15 bps include Macquarie, Suncorp, ING, AMP, Qudos Bank, Bendigo Bank, HSBC and ME Bank.
For investor interest only variable rate loans, CBA cut rates by 25 bps to 5.64 per cent. NAB and Westpac lowered 15 bps to 5.67 per cent. ANZ reduced by 25 bps to 5.74 per cent.
Kirsty Lamont, director of comparison site Mozo says: “The challenge for mortgage customers is now not to fall into the trap of rate cut fatigue. With each official rate cut comes a golden opportunity to take a good hard look at your current home loan and see how much you could save by switching to one of the incredibly low rates on offer from smaller lenders.”